Patties Foods, the Australian pie maker, has confirmed receipt of a “non-binding, conditional and incomplete” takeover proposal from private-equity firm Pacific Equity Partners.

PEP’s offer is for 100% of Patties shares. The investment vehicle said it will pay AUD1.65 (US$1.19) per Patties share, including any dividends paid after the proposal sate. The deal values Patties at around AUD230m. 

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Prior to the announcement, Patties shares were trading on the Australian Stock Exchange at around AUD1.33 but jumped sharply on the announcement to trade at AUD1.57. 

The Patties board said it will engage further with PEP. Patties chairman Mark Smith stressed the discussions are ongoing and, as such, there can be no assurance that the proposal will result in any formal offer being made to the company’s shareholders. 

“The board remains confident in management’s plans for growth in the core brands and the business is experiencing strong momentum” said Smith. 

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The company said it will update the market on any “material developments” in relation to the proposal. 

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Patties results have been hit of late by a massive recall of certain frozen berry products and the company reported an 11.8% drop in first half earnings earlier this year. The group has been restructuring its operations in order to improve profitability and the firm announced in December last year that it is selling its frozen fruit unit in order to focus on its bakery brands, which include Four’n Twenty, Herbert Adams and Nanna’s Sweet Pastry.